Britain's rich and famous are moving out of central London's most up-market
districts and being replaced by wealthy overseas buyers, according to new
research.

Savills, the estate agent, says £3.7bn of foreign money is pouring into the prime London housing market every year and especially into areas such as Mayfair, Kensington, Notting Hill and Chelsea.

The demand is leading to UK owners selling their homes and moving to outer London, creating a "champagne tower effect" with the distribution of wealth in the capital.

Savills' report, called World in London and published on Friday, says British sellers of homes in central London have outnumbered British buyers by 30pc this year, compared with 5pc in 2008. Meanwhile, foreign buyers have outnumbered foreign sellers by 58pc in 2011, up from 23pc in 2008.

The market is being boosted by the weakness of sterling and the perception of London as a safe haven amid political and economic uncertainty.

Yolande Barnes, head of residential research at Savills, said: "We anticipate that London will continue to attract overseas buyers in the foreseeable future, especially with the eyes of the world on the London Olympics next year. "The diversity of economies from which these buyers originate and of their motivations for purchase, mean that there will nearly always be an overseas market for London property for as long as London remains a major global city."

The data shows that from 2007 to 2011, the most prevalent overseas buyers in London have been from Western Europe, with 11pc of the market by value. This group includes an increasing number of buyers from southern European countries such as Italy, Greece and Spain as they invest outside their homelands to avoid economic uncertainty.

However, in central London, the biggest investors have been from Eastern Europe, including oligarchs, with 15pc of the market and an average purchase price of £6.2m. Middle East and North African buyers account for 14pc and spend £4m. The average spend of British buyers is £1.5m.

In 2010 overall, overseas buyers made up 54pc of investment in central London properties worth above £5m.

The international demand highlights the split between London's housing market and the rest of the UK, which is suffering from a lack of mortgage availability and spending cuts. While growth in UK house prices stalls, Savills has forecast that prime London prices will grow 33.4pc in the five years to the end of 2015.

"While a combination of rising sterling and falling commodity prices might appear to be a particular risk for prime London real estate prices, these tend to run counter-cyclical to domestically-generated wealth from UK stock markets, economic growth, IPOs, etc," said Ms Barnes.

The biggest source of growth in the market is likely to come from China, India, Pakistan and Latin America, she added. "If the money from China were to start flowing into London at the same rate it does from billionaires in other countries, we would expect the values of ultra-prime London properties to grow by as much as 15pc. The issue at present is that Chinese buyers aren't taking, or can't take, their money out of China."